The In five years, Kent Duncan will etire. He is exploring the possibility of opening a self-service car wash wash could be managed in the free time he has available from his regular occupation, and it could easily when he retires. After careful study, Mt. Duncan determined the following: be closed Total Prese intrac with a Manage Calculat a. A building in which a car wash could be installed is available under a five-year lease at a cost of $4,100 per month. b. Purchase and installation costs of equipment would total $305,000. In five years the equipment could be sold for about 10% of its original cost. c. An investment of an additional $5,000 would be required to cover working capital needs for cleaning supplies, change funds, and so forth. After five years, this working capital would be released for investment d. Both a wash and a vacuum service would be offered. Each customer would pay $1.35 for a wash and $.70 for e. The only variable costs associated with the operation would be 7.5 cents per wash for water and 10 cents Present intracity with a n access to a vacuum cleaner per use of the vacuum for electricity f. In addition to rent, monthly costs of operation would be: cleaning, $2,600; insurance, $75; and maintenance $1,825 g. Gross receipts from the wash would be about $2,700 per week. According to the experience of other car Calculation washes, 60% of the customers using the wash would also use the vacuum. PresentV intracity d with a nev Loose-leaf Ve Mr. Duncan will not open the car wash unless it provides at least a 12% return, Click here to view Exhibit 13B-1 and Exhibit 138-2, to determine the appropriate discount factor(s) using tables. Required: 1. Assuming that the car wash will be open 52 weeks a year, compute the expected annual tet cash receipts from its operation. 2-a. Determine the net present value using the net present value method of investment analysis 2-b. Would you advise Mr. Duncan to open the car wash? Present Valu intracity deli with a new t Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 28